(3 of 3)
Some Nintendo watchers say great games won't be enough. Casual players who were charmed by the Wii now have endless options, nearly all of which cost far less than a console and console games (which run $40 to $60 a pop). "The generation of young women who bought a Wii to play Guitar Hero has moved on to smart-phone and social games. The same is true of middle-aged women who bought a Wii to play Wii Fit and older women who bought a Wii to play Wii tennis," says Michael Pachter, a research analyst at Wedbush Securities.
But Nintendo has been underestimated before. Until the Wii's release, multiple observers predicted that the PlayStation 3 and Xbox 360 would outsell it. The Wii went on to become the industry's top home system, an honor it maintained through 2010. This may help explain why Nintendo has a history of cheerfully ignoring the advice of pundits. The Wii U may not be a sure thing, but it's exactly the machine Nintendo wanted to build--and it's impossible to imagine anyone else building it.